Great news: Congressional gift shops also run deficits

posted at 3:05 pm on January 18, 2012 by Ed Morrissey

Well, why not? After all, what tourist visit to Capitol Hill would be complete without some souvenir red ink?

Both of the gift shops at the Capitol Visitor Center (CVC) are losing money, despite the 2 million people who visit the U.S. Capitol every year.

The Architect of the Capitol’s office (AoC), which oversees the shops, won’t say how much they lose. An annual report from the office showed the shops had $3 million in revenue in fiscal 2010, but the report offers little information on its costs, making it impossible to figure out how much the shops are losing.

Lawmakers were worried enough about the mounting losses to include language in last month’s 2012 omnibus spending measure to figure out how to make the shops profitable. The provision asks the AoC to report back by March 31 with a plan to get the shops out of the red.

The gift shops employ 20 people, which costs more than a million dollars in personnel costs, including benefits. That’s not a surprisingly large number, even for a retail environment. If the overhead can be reasonably calculated at 25%, that would make the average annual salary for employees about $40K per year with another $10K in benefits. That’s pretty good pay for retail — something just shy of $20 per hour — but it includes the pay for managers, and the shops are located in Washington DC, where personnel costs will be higher anyway.

I’ve been in the gift shops a few times. They have two in the basement of the Capitol, but it’s not terribly clear why they need two shops. For the traffic they generate, one should suffice. The location of the shops are also puzzling; even in the commons area of the visitor center, they’re not easily seen, concealed as The Hill notes by large standing concrete walls, presumably to buffer the noise going both directions.

I’ve also seen the prices on the souvenirs, which make it hard to believe they’re selling the merchandise at break-even pricing. The shop blames a 2009 “Buy American” directive for their fiscal woes:

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

“The gift shops operate under policies and procedures that differ significantly from typical retail establishments, including meeting ‘Buy America’ requirements,” said Eva Malecki, a spokeswoman for the office.

The Buy American restrictions were first imposed at the behest of Rep. Robert Brady (D-Pa.) in 2009, according to his office.

A gift shop employee, who asked to speak anonymously, suggested visitors find the shops’ gifts too expensive even if they support the idea that the shops should only sell items made in the USA.

“They don’t like ‘Made in China,’ but they go shop at Wal-Mart,” the worker said of those who visit the gift shops.

At least they’re not selling French fries and French toast! Seriously, though, why does Congress feel the need to operate gift shops at a loss in a city where souvenir shops abound — and presumably don’t run in deficits for their private-sector owners? People sell DC souvenirs and memorabilia everywhere in the district, including on the streets. The material sold in the shops is objectively of higher quality than some, it’s true, but the Smithsonian gift shops sell high-quality merchandise without losing money, and their items can also be purchased on line. Perhaps it’s time that Congress got out of the souvenir business and found a better use for its resources.

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

My parents went to Washington and all I got was this lousy tee shirt that could have been made more cheaply in Honduras.

If I were the owner of those shops from a strictly private business perspective: I would close the shops. A business would file for bankrupcy or close the doors rather than lose capital (in this case, Capitol?) in such an environment.

Further proof the government doesn’t know a da**ed thing about making jobs or making a profit.

that would make the average annual salary for employees about $40K per year with another $10K in benefits. That’s pretty good pay for retail — something just shy of $20 per hour — but it includes the pay for managers, and the shops are located in Washington DC, where personnel costs will be higher anyway.

Aren’t these public jobs and, thus, the salary information is public?

There is a web site in NC where you can look up the salary of any state employee. Don’t the feds have such a site?

The Gift Shops are on the upper level and are open 8:30 a.m. to 4:30 p.m. Monday through Saturday. The Gift Shops feature a unique selection of merchandise inspired by the Capitol’s art and architectural treasures, fun and educational gifts, books, jewelry and exciting custom-designed products unavailable anywhere else.

“Unavailable anywhere else”. Probably because privately-run companies knew they couldn’t make any money selling the crap.

The congressional gift shop is the only one where you can get the Barney Frank Squeeze doll with extra sharp pencil. You can bend him, you can squeeze him and use the pencil to find his G Spot and when you do he squeals with delight. Only $29.95 at the shop or any man on man action website.

The Architect’s office blames the losses on restrictions that force the shops to sell only goods made in the United States, which tends to increase the cost of its T-shirts, coffee mugs and other souvenirs.

Just another example of government regulations making it difficult to operate a business profitably.

While I appreciate the “Buy American” sentiment – the Capitol Gift Shops are the only stores required to abide by that regulation – allowing the other D.C. gift shops to easily undersell them.

If only our president and members of congress could see how these far-reaching rules and regulations have an adverse affect on businesses both small and large.

In my state you have to go to a state liquor store to buy liquor and wine. No other entity is allowed to sell anything other than beer. And being the only game in town, the state liquor stores have found a way to operate at a loss, necessitating subsidies to stay in business. If you’re the only game in town and you sell liquor and you can’t turn a profit, you must be drunk. Or a bureauocrat.

Do you suppose it might have to do with their product? I mean, who wants to walk around in a “U.S. Congress” tee-shirt, about the most despised group in the country right now. Sort of like trying to sell New York Giants shirts in Green Bay right now.

O/T A rabid Mizzou Tigers fan (my old school), but was glad your Cowboys made mockery of them snob boys from Stanford.

Horace on January 18, 2012 at 3:38 PM

It was good to beat the stupid Tree, no doubt.

Sad to see your Tigers leave the Little 10. I think that the conference is in a death spiral – and I sure don’t blame you guys for going to the SEC. The competition is gonna be tough, but it’s the best football conference.

Do you suppose it might have to do with their product? I mean, who wants to walk around in a “U.S. Congress” tee-shirt, about the most despised group in the country right now. Sort of like trying to sell New York Giants shirts in Green Bay right now.

Trafalgar on January 18, 2012 at 4:13 PM

I saw a T-Shirt last week that made me smile for days, even though it was out of season:

The media has reported that Harry Reid, the manager of one gift shop, verified that the manager of the other gift shop – Nancy Pelosi, had been agressively cutting prices and using non-union made merchandise, in an effort to run him out of business!

If the gift shop analogy doesn’t make you realize how the gov’t has screwed up this country, nothing will. Shops created by politicians and run by gov’t functionaries selling junk that is too expensive when made in the USA due in no small part to gov’t regs and reqs.